China’s capital control and Chinese buyers for Forest City

We should not rely only on Chinese buyers for the property market. In fact if the percentage of foreign buyers ever reach 30 percent of the total transactions, we should be worried. At this moment fortunately their purchases are limited to the more luxury ones and not the affordable ones which are for Malaysians. Just look at how Singapore is limiting the foreigners who wish to buy properties and you would realise that all these limitations are necessary so that the locals are more protected. Here’s a good article about foreigners buying Singapore properties. Foreigners thinking of buying properties in Malaysia would actually be limited to the more expensive units too. Iskandar Malaysia is one place where the Chinese developers first started to come in on a huge scale and with them, the chinese buyers too.
One of the earliest and most famous of these developments from mega Chinese developers would be Forest City. It has recently handed over the keys for 132 apartments and completed a luxury hotel. Attached would be the image of the 5-Star new hotel called Hotel Phoenix. The ratings are pretty high actually, 8.4 and the pool really do look nice. There’s another article in TheStar talking about the US$100 Billion Forest City hit by capital controls Briefly, it spoke about how Forest City used to be visited by droves of potential buyers from China. These have stopped. It quoted a few buyers who expressed doubts about their purchase and their worries. Chinese citizens could take out US$50,000 per year BUT they need to sign a pledge that they wouldn’t use it for property investment. It quoted Country Garden which said that the capital control has not had a material effect on sales and that construction is continuing. The article also quoted Samuel Tan, executive director at KGV International Property Consultants who said, “Given the oversupply, we don’t foresee any recovery until 2019 for high-rise projects.” Full article by Bloomberg published in TheStar here. 
While the title was “The US$100 billion Forest City hit by capital controls,” the content was not that bleak actually. It quoted some buyers who were worried but it also quoted Country Garden who said they sold 16,000 units in 2016. I think we would only be really certain when these units start to be delivered. By then, if the advertisements are mostly from real estate agents with lower price than the original, we would know that there are unsold units. However, if prices remain above the original price, I think Country Garden’s insistence about ForestCity’s prospects is still based on facts. Or perhaps those who bought earlier were still able to pay for the properties they booked, somehow. Oh yeah, for Iskandar,  there are quite a number of units to be completed by September 2017 as reported earlier. It is Country Garden’s Danga Bay development. It will be a test on the property market. I love Iskandar Johor but has not yet saved enough for a unit there. Nope, not looking at new ones, would only be interested in units that I could immediately rent out. Oh yeah, an earlier article about Country Garden’s Forest City here: Forest City showrooms in Vietnam, Myanmar, Taiwan, Dubai and Japan 
written on 23 June 2017
Next suggested article: Is Iskandar getting better? Or worse? Media reports


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